Banks generally have several ways to deal with such bad debts. The method of 1 is to directly deal with the collateral at that time, or directly go to the guarantor. The second method is to deal with these bad debts by borrowing the new and returning the old. Maybe many people don't know what bad debts are. In fact, they refer to the money lent by the bank, but if it cannot be returned in time, this part of the account is called bad debt by the bank.

Generally speaking, if we want to get a loan from a bank, we must have collateral or a guarantor. For example, when many people buy a house, they will mortgage the real estate license at the bank. If they don't repay the loan in the future, the bank will deal with our collateral, which means that the bank will auction our house directly and then use the auction funds to repay our loan. Others will find a guarantor to handle the loan, and the bank will definitely find this guarantor.

In addition, some enterprises will apply for loans from banks. However, after the loan is completed, the business of this enterprise may not be particularly good, so the enterprise is unable to repay the loan, but the bank will conduct a systematic evaluation. If the bank thinks that this enterprise still has development potential, then the bank will come up with a sum of money to help the enterprise tide over the existing difficulties, so that the enterprise can continue to generate profits and then repay the loan, which is actually a better method for both parties.

If these two methods don't have much effect, then banks will receive these bad debts through financial asset management companies. Financial asset management companies are actually institutions established after the approval of the state. Its main function is to receive these bad debts from banks, and then realize these debts through prosecution, debt collection or leasing. Of course, banks will not take this approach unless they have to.